Cadence Capital (CDM) Investor presentation summary

Fund performance and yields

• CDM delivered a 24.0% YTD return and 22.2% over one year, outperforming the index by 18.7% and 15.4% respectively; since inception, annualized return is 11.2% versus 7.5% for the index.

• CDO achieved a 37.5% YTD return and 34.9% over one year, outperforming the index by 32.2% and 28.1%; since inception, annualized return is 24.0% versus 10.2% for the index.

• Both funds have paid dividends significantly above the market, with CDM and CDO franked yields for 2025 at 8.8% and 7.8% respectively, about three times the All Ordinaries Index.

• CDM and CDO shares trade at discounts to NTA, with CDM at -12.7% and CDO at -6.3%.

• Both funds maintain large profit reserves, covering more than four years of dividends at current rates.

Market trends and macroeconomic context

• Long-term interest rates have risen sharply since 2022, with the trend not yet confirmed as reversing.

• Australian CPI inflation stands at 4.2%, above the RBA's target, driven by housing and transport costs.

• The AUD has strengthened against major currencies over the past year.

• Market valuations remain high, with PE ratios elevated and EPS growth subdued.

• The current environment is compared to the 1970s, with persistent inflation, resource scarcity, and geopolitical disruptions.

Investment process and philosophy

• Combines fundamental and technical research to identify value and manage risk.

• Fundamental analysis focuses on PEG ratio, cash flow yields, and balance sheet strength, with over 1,000 company visits annually.

• Technical analysis guides entry and exit points, using trend and volume indicators.

• Short positions are closely monitored, with alpha generation as the objective.

• Participates in a range of market opportunities, including IPOs, placements, arbitrage, and block trades.